Unocal, PLN, Pertamina Agree on Geothermal $

Unocal Corporation said its Unocal Geothermal of Indonesia, Ltd. (UGI), subsidiary and Dayabumi Salak Pratama, Ltd. (DSPL), a 50 percent equity invester of UGI, reached agreement over pricing and production issues at the Gunung Salak geothermal project in Indonesia.

El Segundo, California – July 24, 2002 [] UGI and DSPL reached agreement with PT. PLN (Persero) (PLN), the Indonesia state-owned electricity company, and Pertamina (P.PTM), the Indonesia state-owned oil and natural gas company. Gunung Salak is a 330 MW geothermal steam production and electricity generation project on the western side of the island of Java. UGI operates the steam fields as a contractor to Pertamina and delivers steam to PLN, which operates three electricity-generating plants at Salak. UGI also delivers steam to DSPL for three other generating plants that supply electricity to PLN on behalf of Pertamina. The new agreement extends the contracts to 2040 and includes a commitment by PLN to accept as much steam and electricity as possible to meet increased demand in the Java-Bali electricity distribution system. In addition, the agreement reaffirms the Government of Indonesia guarantee of PLN’s obligations to UGI, DSPL, Pertamina and the project’s lenders. The agreement lowers the selling price of electricity delivered by DSPL and steam supplied to PLN by UGI. It also provides for payment by PLN of a portion of the past due receivable balances to Unocal while Unocal foregoes a portion of the receivables. With this agreement in place, Unocal’s worldwide Geothermal and Power business segment is forecast to have after tax earnings of US$40 to US$50 million in 2002, compared with US$11 million in 2001.
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